Consider sell-on clauses when flogging school land, leaders told

Department for Education's property arm publishes new guidance to help schools 'unlock potential' in estates

Department for Education's property arm publishes new guidance to help schools 'unlock potential' in estates

24 Jan 2024, 14:00

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Schools should consider trying to secure sell-on agreements with developers when flogging surplus land to fund vital rebuilds, new government guidance has said.

LocatED, the Department for Education’s property company, has today released a handbook to help local authorities and academy trusts “unlock potential” in their estates, amid “growing demand” for sales.

It comes as documents, seen by Schools Week, show dozens of sites reviewed by the government-backed firm for redevelopment were discounted for featuring protected land and flood zones, among other things.

Unions said “we’ve surely reached the bottom of the funding barrel when schools are being advised to sell off land in order to pay for capital projects”, after Schools Week revealed the guidance was to be published.

But Will Attlee, LocatED’s head of estates, believes the new advice will help leaders “navigate the development process” and generate cash for “new or improved” school buildings.

Lara Newman

“While schools and responsible bodies should always look for alternative funding options prior to disposing, development of this kind can free up resources … this will help deliver better learning environments for pupils.”

LocatED CEO Lara Newman added that her team has “seen growing demand from education leaders for our help in unlocking potential” in their estates.

“This document provides an easy-to-use guide for schools embarking on that journey.”

The guidance sets out four stages to the development process, explaining how to navigate site assessments, stakeholder engagement, feasibility assessments and delivery.

It recommended that in all cases “consideration should be given to whether overage or clawback provisions should be included as part of the deal structure”.

Schools guidance ‘in no way advocates for land disposals’

This, the advice said, ensures “the benefit of any future uplift in value (if, for example, the purchaser sells the site at a profit within a certain time period) is shared”.

Meanwhile, the DfE’s land transactions team should be engaged “as early as possible” to assess early proposals and “provide pre-application advice”. This will “help inform the design in the feasibility stage and ensure that work is not abortive”.

It also stressed that the guidance “in no way advocates for the disposal of school land”.  Responsible bodies – which include councils and academy trusts – are recommended to explore “alternative funding options”, before deciding to sell plots.

Other options include lettings and using spare space for “energy generation”.

LocatED revealed last year it had been asked to assess 316 school sites with surplus land. Data obtained through Freedom of Information shows 281 were ruled out for development.

Thirty were special or alternative provision schools which LocatED “considered would not be appropriate for this kind of scheme”. A further 76 were on designated green belt or metropolitan open land, while 12 were in flood zones.

It was concluded a number of other schemes would produce “insufficient” capital receipts “to provide a meaningful investment in the school, once costs [are] taken into consideration”.

LocatED was later commissioned to undertake further analysis of 132 more sites, of which five were considered worthy of further consideration.

Up to 10 others “may be possible longer-term projects” where the land could be promoted through the local plan process.

It was also revealed last month how the company hopes to roll out schemes that will see rundown inner-city schools operate within newly constructed blocks of flats.

Officials recently completed feasibility studies on bankrolling the revamp of St James Hatcham Primary in south London through the creation of 100 homes.

Its sports hall is earmarked for space across the block’s ground floor, while classrooms will be located on the level above. Affordable housing will be spread across the building’s upper floors.

A LocatED spokesperson said the firm believes “there is potential for this type of development across other sites in city centre locations”.

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